Qfin Holdings reported a sharp contraction in second-quarter 2026 earnings and lending activity as China’s consumer credit market faced tighter regulation, industry contraction and what management described as an industry-wide liquidity shock late in the quarter.
Total facilitation and origination loan volume declined 25.1% year-over-year to RMB63.38 billion. Total outstanding loan balance fell 23.2% to RMB107.56 billion. The capital-light, Intelligence Credit Engine and technology-solutions portion of quarterly loan volume declined a more moderate 10.5% to RMB31.34 billion.
The lower activity translated into a significant financial decline. Total net revenue fell 31.6% year-over-year to RMB3.57 billion, or approximately $525.6 million, from RMB5.22 billion. Net income dropped to RMB401.4 million, or $59.2 million, from RMB1.73 billion, a decline of roughly 77%. Non-GAAP net income fell to RMB454.9 million from RMB1.85 billion.
Risk metrics showed a mixed picture. Qfin reported a Day-1 delinquency rate of 5.6% and a 30-day collection rate of 88.1%, with management saying it tightened risk standards, upgraded its user mix and refined collections as funding constraints increased volatility across the industry.
Despite weaker earnings, Qfin generated approximately RMB1.1 billion of operating cash flow and ended the quarter with roughly RMB10.6 billion of cash and short-term investments. The company also declared a semi-annual dividend of $0.46 per ADS for the first half of 2026.
Management said it intends to take a more prudent approach to growth, risk and capital deployment while continuing overseas expansion and efforts to become an AI-native organization.
KEY QUOTES:
“In the second quarter, we navigated a challenging market environment marked by continued industry contraction, tighter regulatory oversight, and a sudden industry-wide liquidity shock in late June.”
Haisheng Wu, Chief Executive Officer and Director of Qfin Holdings
